The Citi market-crash clock says it's 5 minutes to midnight

Citi published a scary update to its market clock chart at the
end of last month. According to Citi's analysis, the economy has
moved into Phase 4 of the economic cycle, the point at which both
credit and equities move into recessionary downward cycles:

Citi

The US is further along in the clock rotation than the eurozone
is. But both are heading into the dreaded Phase 4.

Phase 1:This begins at the end of
a recession, when
interest rates have fallen, money is cheap, but stocks are
still battered.

Phase 2:A bull market sets in during
phase 2, when stocks
start to rise as easy credit lubricates the economy.

Phase 3:This is the tricky part.
Stocks are still flying high, but credits spreads are widening
as investors become increasingly unwilling to finance further
risk. Corporate CEOs have now experienced a lengthy period of
gains and become risk-happy. (And we'd note that
central banks are already talking about tightening creditby raising interest rates.)
Bubbles can form in Phase 3, as the high-flying stock market ignores
the early warning signs of the deteriorating credit
market.
Hello, tech startup IPOs!

Phase 4:Stocks react to the lack of
available credit by collapsing, and we see the kinds of things
you get in a recession: "This is the classic bear
market, when equity and
credit prices fall together. It is usually associated with
collapsing profits and worsening balance sheets,"
Buckland said last year.